Thousands of fans watched the match on cafe terraces in towns and cities across Croatia. A thunderstorm that hit the Croatian capital just before the match chased away many fans, but thousands of supporters still gathered at the Zagreb's main square. (Agencies)
Nearly all were dressed in Croatia's distinctive red and white squared shirts as they watched the match on a 52-square-meter screen above an improvised stage.
"It's a pity, the referee ruined us!" said a bitter Goran Vlahic, 28, as he was leaving the square with his girlfriend.
He was referring to Japanese referee Yuichi Nishimura's highly dubious decision to award a penalty in the second half after Fred backed into Croatian defender Dejan Lovren and fell over.
Vlahic echoed the view of many fans, and national team coach Niko KOvac included, that the referee was making "bizarre decisions" to Croatia's detriment.
"If that was a penalty then we should not play football anymore!" Kovac told Croatian state-run HRT television.
"It's shameful. We did our best... I'm disappointed," he emphasised.
The Croatian papers labelled the clash the "biggest match in Croatia's history" and the whole country has been gripped by World Cup fever.
Cafes have installed new TV screens on terraces and been redecorated in red and white chequerboard patterns. There were live broadcasts in the main squares of big towns and cities.
Giant posters of the Croatian team stare out from shop windows in the capital Zagreb, especially midfielder Luka Modric and striker Mario Manduzkic. Many shopkeepers also wore red-and-white jerseys.
World Cup fuelled patriotism is expected to lead to a 30 percent boost in alcohol sales.
Croatia needs a boost. The economy is entering a sixth year of recession, with unemployment topping 22 percent.
Using the 2008 European Championships, Croatia's last appearance at a major football tournament, as a benchmark economists expect each match in Brazil to generate 50 million euros ($68 million).
That means the team's three opening group matches will add an estimated 0.35 percent to annual output -- and more if they progress into the later rounds.
The economic crisis means few Croatians have been able to make the pilgrimage to Brazil, but some 6,000 Croatian fans were at the opening match in Sao Paolo.
That has left authorities having to cater to huge crowds back home. In Zagreb's main square up to two million people are expected to pass through a giant "Fan Zone" to watch the games over the next month.
Many in the country of 4.2 million are just glad to have some distraction from day-to-day economic worries.
"For small nations such as ours, these sports events provide an opportunity to show ourselves off to the world. We still remember the famous 1998 tournament when we showed that we can win against a mighty country like Germany," said sociologist Suncica Bartoluci. Croatia still have to play against Mexico and Cameroon.
Thousands of fans watched the match on cafe terraces in towns and cities across Croatia. A thunderstorm that hit the Croatian capital just before the match chased away many fans, but thousands of supporters still gathered at the Zagreb's main square.